Investing Lessons

Validea's Guru Investor Blog

By Jack M. Forehand — I have raced sailboats since I was 12 years old. It has always been a passion of mine. The combination of being on the water while doing something competitive at the same time has always been a big draw for me. Over Labor Day weekend, I competed in the Stamford Vineyard Race on a friend’s boat Threebeans. The race includes many exhilarating moments, but also significant down time, and during those down periods, I couldn’t help but think about all the parallels between what it takes to do well in a race like that and […]

Over a more than 46-year investment career, former Franklin Templeton portfolio manager Don Reed has learned patience, says a recent Morningstar article. In an interview on January 31st (the formal date of his retirement), Reed offers investors the following insights: Sticking to your guns can be tough: During the tech bull market of the late 1990s, Reed recalls, Templeton owned no tech stocks because the companies didn’t meet the firm’s valuation criteria. With some stocks, patient and long-term investing go hand in hand: Reed says, “The turnover in the Templeton International Stock fund last year was 16%. We didn’t have […]

In his final column for the Motley Fool (posted August 30th), Morgan Housel reminisces about his early days and what he has learned in nine years with the multi-media financial services firm: Investment fees are falling. Investment costs are not. Housel writes that index fund fees now “round to zero. That’s a big win for investors. But the emotional cost of investing is as high as it’s ever been.” Most investment success boils down to avoiding catastrophic mistakes. In the past, Housel contends, “successful investing meant being on the inside, with access to the products and information required to do […]

The impact of Britain’s vote to leave the EU may take years to play out, but there are several lessons investors can learn in the meantime. Daisy Maxey of The Wall Street Journal offers the opinions of some investment and behavioral-finance experts: Timing: A Loser’s Game Translating geopolitical uncertainty into potential market movements is very difficult because, according to William Bernstein, investment manager at Efficient Frontier Advisors in Eastford, Connecticut, “it can be highly counterintuitive. Just because economic growth will be slower/faster doesn’t mean that returns will be lower/higher.” Markets Bring Surprises “Markets are indeed human, and actions people take […]

“Something bad happens somewhere, and markets are unhinged. Once the noise subsides and the markets settles down, everyone wonders what the heck just happened,” writes Barry Ritholtz, chief investment officer of Ritholtz Wealth Management and columnist for The Washington Post. He references the Brexit vote and why it, or other macro events, shouldn’t affect your investment plan. Ritholtz points out that “markets have on average swung 2 percent up or down once every 11 days since the year 2000”. Therefore, he asserts, the volatility in the wake of the Brexit vote should have come as no surprise. The columnist outlines […]